New Law Strengthens the Ukrainian Credit Union System
Changes to the law allow for increased financial access for underserved citizens.
On Tuesday, the World Council of Credit Unions’ (WOCCU) International Advocacy and International Projects team announced a major legal success for credit unions in Ukraine after the Verkhovna Rada of Ukraine, its parliament, passed a new law on July 14 that will amplify access to financing from credit unions to a large underserved Ukrainian population.
WOCCU officials “provided extensive analysis” to lawmakers in Ukraine during its debate of the newly-passed law. According to WOCCU, the law will accomplish the following:
- Expands the list of services credit unions can provide to their members, including currency exchange and certain types of payment services.
- Expands access to finance through credit unions for certain legal entities (farms, cooperatives, trade unions, micro enterprises, housing cooperatives, religious organizations).
- Strengthens licensing, corporate governance and capital requirements in credit unions.
- Expands the ways credit unions raise capital, including through subordinated debt.
- Establishes stabilization and liquidity support funds for credit unions at the level of united credit unions, the central financing facilities.
- Improves procedures for credit union mergers, acquisitions and other voluntary reorganization.
“We could not be happier for the credit unions World Council represents in Ukraine. The new law will strengthen the reliability of the sector and consumer confidence in it by expanding the availability of financial services credit unions can provide to the general public,” WOCCU SVP of International Advocacy and General Counsel Andrew Price said. “Its adoption also paves the way for the introduction of deposit insurance for the credit union sector.”
According to WOCCU, its International Advocacy team and the USAID/WOCCU Credit for Agriculture Producers (CAP) Project in Ukraine “have been developing and advocating for the adoption of the new credit union law since 2016 in cooperation with the National Bank of Ukraine, which regulates credit unions, and the country’s two credit union associations.”
Officials with the CAP Project and WOCCU supported Ukrainian government officials by providing global best practices in credit union operations and suggestions.